The challenge of pricing your product

By no means am I an expert on pricing, but there was a thing or two that I learned during my stint as an MBA student. Forget about adding “X” percentage on top of your COGS. Remember the supply and demand curve? You should focus on the perceived value of your product. How much is someone willing to pay for your product? For instance, (for the ladies) why buy Levi’s over True Religion jeans? Hmm…

If you are not sure about what consumers think about your product, perform some in-depth interviews, surveys, and/or focus groups. Don’t be too anxious about going straight to a survey. Unless you are a domain expert in that subject, you really don’t know too much about consumer behavior. Instead, do 3-4 in-depth interviews to help shape your survey. You might even consider doing a focus group too before sending a survey. Keep in mind that people will always want to pay the cheapest price for products, so create questions that avoid getting such answers. Alright, you’re ready to price your product now. Hahahaha, well better than before. Good luck!

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